The details of the dismal report: Sales fell by 4% to $465 million as net income dropped 16% to $65 million, or $1.15 per share. WTW also lowered its full-year profit forecast to $3.55 to $3.70, down from its previous range of $3.60 to $3.90.

Oh, and CEO David Kirchhoff abruptly resigned!

Of course, while such a sell-off is obviously ugly, could it also make for a great buying opportunity To see, let’s take a look at the pros and cons:

Pros

Brand. To start, Weight Watchers has a well-known name is backed by strong science. The diet plan involves an intensive study on a food’s protein, carbohydrates, fat and dietary fiber content. In fact, the program has been review by over 80 publications for the past two decades, and a recent year-long study from The Lancet Medical Journalindicated that overweight and obese adults lost more than twice as much weight with WTW vs. the standard program for a primary care provider. As a testament to the power of the brand, WTW has actually been able to license it to restaurants and other food providers like Foster Farms, General Mills (GIS) and Kraft Foods (KRFT).

Secular Trends. Plus, dieting overall is becoming more than a fad — and more than about just looking good. To put it simply, there is an obesity crisis, and solutions from companies like WTW could be a big help. Consider that about 11% of adults in the U.S. have type 2 diabetes and more than 30% are pre-diabetic. The disease — which is strongly tied to obesity — is also becoming a problem in Europe and Asia. Given this, WTW has invested heavily in its B2B segment. Essentially, this involves programs with corporations that are looking to find ways to cutback on their healthcare costs.

Valuation. The stock is fairly cheap right now, thanks to the recent sell-off. The company is currently trading for a mere 11 times expected 2014 earnings. What’s more, the dividend is also decent, coming to a yield of 1.8%.

Cons

Membership. Enrollment is the fuel for WTW. Unfortunately, it has continued to weaken. One reason has to do with macro pressures in Europe. See, diet programs are highly discretionary and can easily be the first thing to go when times are tough. Then again, WTW’s marketing has also been uninspiring. The campaigns from celebrities like Jennifer Hudson have simply failed to get much traction.

Competition. The market is full of strong rivals like NutriSystem (NTRI), Herbalife (HLF) and Medifast (MED). The industry is also subject to new trends and fads. For example, WTW saw tepid revenues from 2003 to 2004 because of the popularity of low-carbohydrate diets. A variety of biotech companies are also focused on developing weight-loss pills. If there is an effective treatment, it could be bad news for WTW.

Mobile. This has been a huge problem for Weight Watchers too, as free apps have cut into the business. If you take a look at Apple’s (AAPL) appstore, you’ll see that the company’s app is ranked No. 20. Some of the more popular ones include apps that connect to wrist bands, such as Nike’s (NKE) Running or Fitbit. The bottom line: WTW has really lagged with mobile development … but mobile is clearly the future.

Verdict

The new CEO of WTW, James Chambers, will certainly have a lot of work ahead of him. But the good news is that he has over years in the consumer goods business. On the conference call, Chambers made it clear that the priority will be to ramp up enrollment. This will mean rethinking the marketing strategy and getting much better at mobile. While it will take time, Weight Watchers does have a strong brand and distribution footprint to work with.

With that in mind, WTW still looks attractive for investors looking for a long-term play — especially considering the stock’s appealing valuation.